Numbers show retail sales in Lawrence grew faster than many cities in 2014; west Lawrence retirement complex seeks sales tax break

One view of a proposed 76-unit independent living facility at Pioneer Ridge in West Lawrence. Photo courtesy Midwest Health and City of Lawrence.

We’re part of the billion-dollar club and growing. No, I haven’t resorted to just reading you my mail from the credit card companies. I’m talking about Lawrence’s retail economy and how the latest numbers show we continue to be part of a fairly elite Kansas club. In fact, in one regard, we’re one of the faster growing members of the club.

The final sales tax numbers for 2014 are in, and Lawrence once again topped the $1 billion mark in taxable sales. We are one of nine cities in the state to crack the total. This isn’t Lawrence’s first time to surpass the mark, but we don’t often focus on how large Lawrence’s economy is in relation to the rest of the state. So, let me clear the smoke from the abacus, and we’ll change that right now. Here’s a look at a whole host of figures about Lawrence’s retail economy:

• Taxable sales in Lawrence — everything from retail goods to utility bills — totaled $1.44 billion for the most recent 12-month reporting period. (For you accountants in the crowd, I should note that this technically isn’t all money from 2014. Sales tax reporting lags by one to two months, so the report the state issued in December technically gets us into late November or early December. But the world isn’t perfect, so let’s move on.)

• Lawrence’s sales tax collections grew by 4.1 percent compared with the same period a year ago. Of the nine cities that had $1 billion plus in sales, Lawrence had the second highest growth rate of the bunch. Only Lenexa at 7.8 percent had a more robust year. Here’s a look at the group of nine, ranked by growth rate:

1. Lenexa: $1.21 billion, up 7.8 percent

2. Lawrence: $1.44 billion, up 4.1 percent

3. Kansas City: $2.15 billion, up 3.8 percent

4. Salina: $1.04 billion, up 3.7 percent

5. Overland Park: $3.93 billion, up 3.6 percent

6. Sedgwick County: $8.6 billion, up 3.2 percent (Wichita accounts for the vast majority of this total, but I can’t be more precise because Wichita doesn’t have a city sales tax.)

7. Topeka: $2.54 billion, up 2.4 percent

8. Manhattan: $1.08 billion, up 2.4 percent

9. Olathe: Approximately $2 billion. (A growth rate isn’t readily available for Olathe because it switched sales tax rates midyear in 2014, and my abacus told me such complicated calculations weren’t part of its contract.)

• Lawrence’s per capita spending continues to be on the low side, the latest numbers show. Lawrence had per capita spending of $15,857. Compare that to Lenexa, which had per capita spending of $24,034, tops in the group. Lawrence’s low number can’t be explained away by our status as a university town. Manhattan had per capita spending of $19,236. Geography is probably more of a factor. We’re close to two very large retail markets. Johnson County had more than $10 billion in taxable sales. Shawnee County had nearly $3 billion in taxable sales. What does that tell us? Two things: 1. Lawrence may be in the middle of the most competitive retail corridor in the state. 2. Those Johnson County SUVs have heavy-duty springs to carry all that stuff.

I expect there to be considerable discussion about Lawrence’s retail future in the next several months. One part of that conversation may be for leaders to determine what is a realistic expectation for per capita sales. Does Lawrence concede that it will be a distant No. 3 to Shawnee and Johnson counties when it comes to per capita spending? (We’re obviously not going to catch either one in terms of total spending.) Or, can Lawrence take the approach of some of the cities that have surrounded Overland Park? Overland Park has been the longtime retail giant in Johnson County. But that hasn’t stopped other cities near Overland Park from having robust per capital sales. Here are a few: Merriam, $60,934; Lenexa, $24,034; Leawood: $20,748; Overland Park, $21,861; city of Shawnee, $14,355. As you can see, some have done very well at competing with Overland Park. Others, like Shawnee, have struggled. Its per capita spending is less than Lawrence’s.

• The latest numbers also give an indication of how many retail dollars are near Lawrence. If Lawrence’s per capita spending numbers are to grow, probably three things need to happen: 1. Lawrence residents need to start making more money. 2. Lawrence needs to start getting more shoppers from outside the city limits. 3. Lawrence residents need to make fewer purchases outside of the city. Remember, per capita spending really isn’t a measure of how much each Lawrence resident spends. It is just an equation of total taxable sales divided by total population. So, if you get more people from outside the city buying things, Lawrence’s number goes up. But where will Lawrence get more outside shoppers? City leaders clearly have made a bet that tourists will do some spending. That is part of what Rock Chalk Park is about.

Beyond that, people hope residents from surrounding communities will come shop in Lawrence. But let’s face it, getting people from Johnson County and Shawnee counties to shop in Lawrence will be difficult, unless it is for specialty shopping like you find in downtown. But, there are two other markets to the north and south of us that don’t have all the big retailers that Johnson and Shawnee counties have: Franklin County to the south and Jefferson County to the north. A proposed shopping center near Rock Chalk Park would do more to draw the Jefferson County shoppers, while a proposed center south of the Iowa Street and SLT interchange would do more to draw Franklin County shoppers. These latest numbers from the state give us an indication of how much retail spending is going on in those counties. In Franklin County retail spending totaled $289 million. In Jefferson County it was about $115 million.

Of course, those numbers measure how much was spent in the county; not how much was spent total by their residents. There are large numbers of shoppers in both counties that go to nearby Johnson and Shawnee counties, respectively. But the numbers do give you a sense of the size of the markets. Franklin County is about 2.5 times larger as a market than Jefferson County.

The question city leaders may have to answer in the near future is whether Lawrence wants to get more aggressive in trying to capture dollars from either of those markets.

In other news and notes from around town:

• Today’s a day to probably keep an eye out for more City Commission filings. The deadline isn’t until noon on Jan. 27, but this is one race you probably don’t want to be late to. Several candidates already are campaigning hard. We have two incumbents who haven’t yet announced their plans. I think Commissioner Terry Riordan is likely to run again, but I’m not certain of that. If he does file, he’ll be the 12th candidate to file for the race. The race two years ago had 11 candidates.

As for Commissioner Mike Dever, he hasn’t yet made an announcement, but conventional wisdom is he may not seek another term. He’s already served two, four-year terms. But four years ago, he waited to the last-minute to announce his candidacy, so we’ll see.

We told you last week that city commissioners at their meeting tonight (Tuesday) will receive an incentives request for an expansion of The Eldridge Hotel. Well, there is also another incentive request for a different type of living project. The folks at Pioneer Ridge at Wakarusa and Harvard are seeking industrial revenue bonds to help with the construction of a new independent living complex. We reported on Pioneer’s expansion plans in October. But the incentives request is new.

The company is seeking about $14.5 million in industrial revenue bonds in order to take advantage of a sales tax exemption that comes with the bonds. The bonds will allow the company to buy its construction materials for the project without paying sales taxes. That’s likely to save the company a few hundred thousand dollars in sales taxes. But the company is not asking for a property tax abatement on the project.

As for the expansion, it calls for 76 new independent living units to be built on the vacant site just to the south of its existing facility.

Just like The Eldridge Request — which is seeking both an IRB and a property tax rebate — commissioners are not expected to take any final action at their meeting this evening. Instead, they’ll refer the requests to staff for study and recommendations.